Getting into Business

Emerging entrepreneurs can be a different breed. They are excited about their business ideas and are driven by their passion… but it may also blind them to some degree. How do people start a business with their eyes wide open and set themselves up for success right from the start?

Passion is essential

First, passion and conviction are essential. You need to know who you are and what you want to do. Then there is the choice of business model and knowing your product or service inside and out. You want to be ready to eat, drink and breathe business ownership… and wake up and do it again the very next day.

Know your market

Even if you have the best business idea and you are confident in your ability to make a product or provide a service and set up a successful business model, the great arbiter of success is the marketplace. Your business concept must be viable, not just to you, but to the people who will be your target market. How do you know your business expectations are not fiction? To get the answer, you must talk to people, survey potential customers or clients, and test your assumptions.

Test your concept

Once you have an idea of the marketplace, you want to test the concept. You can pop up in someone else’s space or test your product or service at a street fair or makers fair. You can get friends to hold events and sell your product in their living rooms. You can convince a friend who has a retail shop to let you set up a trunk show. If all goes well, the experience will make you feel more secure that your business idea is a good one and that you want to own and run a business.

Can you now say YES to these 5 key questions?

Do I really enjoy being in business?
Can I attract the customer or client who will appreciate my business and will pay for it?
Am I good with customers and can I provide excellent service?
Does my business model make money or will it at least break even “soon”?
Can I envision myself persevering for the next 12 to 18 months to really establish my business?

Time for planning

Some degree of prior business planning is essential. To help guide you, you can take a class, read a book, or ask an experienced business owner for support. However you do it, the purpose of a plan is to define your business offerings, specify your market, outline the essential management skills needed, and create realistic financial projections with a well-timed series of action steps. Your final plan will be a useful document for potential investors, funders or business partners. But the primary purpose for writing a plan is for the process itself. It forces you to be objective and critical, identifying weaknesses, challenges and opportunities and setting benchmarks to track progress. Ultimately, it will give you confidence to get into and continue with the business.

Take the plunge

So you have made some initial sales, carved out time on weekends to work on the business and you are still excited about doing it. Actually, it is all you can think about. How do you take the plunge from part-time to all-in?

There are many different ways to do it.

Wait to launch until you have raised enough start -up capital – either through personal savings, bank loans or crowd fundraising.
Convince your friends and family to lend you money (perhaps with no interest) and agree that you do not have to pay them back for at least three years.
Approach your employer and negotiate to work only four days a week and use that extra day to work on your business.
Move from full-time employment to a contractual arrangement so that you can set your own hours and take time off when needed for the business.
Find an active or silent business partner with capital to invest in the new business and cover business expenses for the first year.
Marry well and/or use your future inheritance to support your entrepreneurship habit!
Quit your job and go all in right away, using credit cards to get you through the cash flow negative start-up period.

The path to small business ownership is unique for each entrepreneur. It depends on your tolerance for risk, your access to capital and cash flow, your skills and experience running/managing a similar enterprise, and your support systems.

Time, money and the prospect of failure are common hurdles for almost every small business owner starting out:

How do I find enough time to devote to my business?
Do I have enough funds to support myself while the business is developing/evolving in the first 6, 12 or 18 months?
Can I respond well to short-term failures as I navigate my way to long-term success?

You may struggle to find the right strategy to get your business off the ground but if you have passion for your business idea, some success from product or service testing, solid financial projections, and a strong support network… YOU CAN DO THIS!

Are entrepreneurs crazy? Sometimes yes. But that’s just what may be needed to jump in and swim! Some start in the shallow end of the pool and tip-toe down the stairs. Others lower themselves down the ladder until they are fully immersed but continue to hold onto the edge. And then there are the ones who leap off the diving board straight into the deep end. No matter your approach, just make sure you can see the edge and make your way back to solid ground as needed. But if you really want to swim in the world of small business ownership, you first just have to get into the water!

Baseball and small business… oh the similarities!

I’ve been a fan of baseball ever since Willie Mays roamed center field for the New York Giants. When I played Little League in Vancouver, Canada my teammates and I all had heroes who played our position in the Majors. I was a center fielder so Willie was my hero. I moved to San Francisco over 30 years ago and re-connected with my love for Giants baseball.

The recent Giants World Series win (woo hoo!!) has me thinking about the similarities between playing Major League baseball and running a small business…

It takes specific skills and years of practice
A baseball player must spend years in the Minor Leagues honing his craft and developing the skills, strength and confidence to perform well. He also has to get noticed.

Similarly, in the world of small business, successful entrepreneurs are those who have had a lot of practice developing the skills relevant to their product/service. By educating yourself about your industry, doing thorough market research, working for others, and starting with a pop-up or a simple business model that can grow with time, you can set yourself up for “major” success.

Success comes from trying, failing, and trying again
An excellent batter in baseball is only successful 30% of the time. Occasionally a batter might get on base with a walk or because of someone else’s error but he has to face failure with each batting experience. It is very hard to hit a small round ball hurdling through the air from 60 feet away at 90+ miles per hour!

A small business owner won’t be able to make a sale with every customer or client interaction. Being successful means putting yourself out there and reaching out to customers and clients over and over. You may have to contact a potential client 5 to 10 times before they are convinced to “take as swing at your pitch”. Yet with every business “failure” you will gain experience and confidence.

It is a team effort of stakeholders
The pitcher needs to throw fast and get the ball over the plate, the catcher needs to catch the ball, and each infielder and outfielder needs to be ready for every pop-up, fly or ground ball. Everyone has to work in coordination to keep a runner from scoring. That coordination and synergy is central to success—both for the offensive team and those on defense.

As a small business owner, your most important asset is your team. First it starts with you as the leader. Then there are the people you hired and trained who work hard alongside you to make the business a success. Most business owners can’t do it all themselves. Even if your business is too small for employees, there are professional support people, vendors, investors, clients and customers that all have a role to play. They are all stakeholders in the business.

It requires fans
Nothing feels worse than going to a baseball game with lackluster support in the stands. The fans are the 10th “player” on the field. Their enthusiasm and encouragement (and sometimes discouragement) can make a huge difference in the course of the game.

Businesses don’t just need customers and clients, they need enthusiastic and loyal customers and clients. They need fans who will “cheer loud” and spread the word—write positive testimonials, refer the business’ products or services to friends and family, and get others excited, too. Consistent contact and positive messaging to your fan-base is needed in both baseball and in small business.

You need a great coach or advisor
Bruce Bochy is an amazing manager—coaching the Giants to three World Series in five years! As a coach, he decides who plays each position, the batting order and when the pitcher will change. His attention to detail throughout the game can affect the outcome. Players on the team also take on the role of “coach”—helping to keep their team members motivated and working together. Hunter Pence or Buster Posey play this role with their constant encouragement to their teammates.

In business, the owner is often the “coach”—training new employees, guiding staff and creating at atmosphere of trust so employees feel welcomed, supported and motivated to take risks to grow the business. But small business owners need their own coach, too. This could be a trusted business advisor or mentor or it might be peers who are grappling with similar business challenges and opportunities. (PTA plays this role for many of our clients.)

You must take a position and play to your strengths
Some baseball players have an outstanding pitching arm, others seem to always connect the bat with the ball, while others are super fast on their feet. Players must play positions best-suited to their skill-sets.

Small business owners must play to their strengths, too. First, it’s important to understand what skills are needed to run your business well. Then, to be honest with yourself about what you do well and what you don’t (and what you would rather not do). Others should be hired to fill any gaps.

There are the stars
The Giants had some real stars this season, like Madison Bumgarner and Hunter Pence. They performed well under pressure and made the magic happen.

Small business owners and managers need to be stars, too, by “performing” well in every customer and client interaction. You must know your products or services inside and out and consistently rise to every challenge, be they complaints, delivery issues, employees who quit, or other unexpected emergencies.

Support people make everything work
A baseball team can’t be made up of “starters” only, though. There must be a solid crew of players who can be counted on to play well and become utility players at times, pinch-hitting when there is a need. And we cannot forget about all the behind-the-scenes people who make each ball club function.

Successful small businesses also need support people to make everything tick. Even a one-person small business needs a bookkeeper, administrative services, legal and insurance help, and access to the banking community.

You must take breaks and time off to rest and recharge
For eight months of the year, baseball players practice, stay in shape and play hard. But it isn’t non-stop. They take breaks to recuperate and for intense positions, like pitcher, players won’t even play the entire game.

Small business owners are always go-go-go and do not usually get to work just eight months of the year—at least not right away. A fast and constant pace is often required to get and keep customers or clients and manage cash flow. But it is key to manage your time well, too, both on and off the job. Taking a break to rest and have creative time is essential.

When you close a deal and win, it is oh so rewarding!
Every year baseball players go through arbitration or salary disputes. Sometimes they have long-term deals for two or three years but they still have to close the deal, perform at a higher rate and sometimes move to a different team. (We will see how Pablo Sandoval does in Boston. Sometimes your competition convinces your best people to leave.)

As a small business owner, you also have to close the deal. You have to make the sale, hire or fire the employee, open a new store, bring in a new manager, and continue to meet the complexities of the business by increasing your management, marketing and financial acumen (or finding others to help). And every time you make a sale, hire a new employee, find a new location and grow, it is incredibly rewarding.

It is a lot of fun and it is hard work
Baseball players play hard and they get to revel in a great hit, catching the ball for an out, or scoring a run. After all, it is just a game!

As a small business owner, owning a business is the hardest work you will ever do. But it is also a lot of fun—you get to follow your passion, blaze your own trail, create jobs, contribute to your community, and make a difference.

Now, if only the pay rate for small business owners was in the baseball player “ballpark”, we small business entrepreneurs would have it made!

Food for Thought

June 13, 2011
Business of Food, Trends in Small Business
PTA
No Comments

Food as a small business and the business of food. Taste and preferences have radically changed and there are so many new businesses that are popping up in the Bay Area. In fact, “pop-up” defines many new neighborhood food businesses. You do not have to “go to them”…they will come to your neighborhood – farmer’s markets, food carts, food trucks, or food events at an abandoned cafe once a month. You go online and hear about it all from a tweet, a whistle or a hoot. So many opportunities for cooks to get their ideas out there and be tasted.

Do you support your local food vendors, confirm they are local and legal and see that they are there next week and the week after? They are passionate about their wraps, their salsa, their falafel and their cupcakes. And they are a business…they need to be supported and sustained. You buy from them and stay loyal. They are confident to stay in business, track costs and hire people to help them out.

Tiny micro businesses are popping up and sticking to the wall. They are launched with the passion of the cook and helped by the curiosity of the crowd – having fun, being out and eating the organic, sustainable goodies. This is everyone’s business. Help your favorites run like businesses, give feedback, check for quality and service and be supportive with positive word of mouth. Perhaps most will stay in business if they have fun, love what they are doing and become profitable. Wow… making a profit doing what you love…over and over again. Now that is a thought that we can all relish and support.

A Boom for Micro Businesses: Can You Deliver?

Business is booming for some micro businesses. Recent marketing studies and most small business articles say that it is small businesses that are sustaining and creating jobs. It is the little engine that can. But can it?

There are reports about local food-related and clothing-centric businesses that seem to suggest there are key trends to watch for – not only new and innovative products but how they are being distributed. Gail Lillian, owner of Liba Falafel has leveraged her food truck serving falafels into a stand-alone restaurant business with her recent expansion plans for Oakland. “The truck helped determine the market and build the right business skills – with key access points around the SF Bay Area.”

Micro entrepreneurs are reaching out to the markets – the specific, targeted niche markets that seem to respond to what is being offered and to clients and customers who are willing to pay for the quality or uniqueness of the service. There are pop-up shops and consignment retailers; there are food trucks; food stalls and food kiosks at the corner of your street and in the farmer’s markets. There are neighborhood street fairs for clothing lines and third world imports.

There are many, many “distribution channels”…and there are more and more businesses that are succeeding online with well-designed websites too. Laurie Kanes runs 12 Small Things, an on-line business providing access for artisans from many developing countries. Her focus and purpose is to “showcase and sell fashionable, fair trade products from artisans facing some of the most challenging conditions in the world”. This socially relevant business is targeting a niche and to do it well, must also execute and provide impeccable service. Laurie notes, “My competitive edge is to develop key partnerships to access the right markets and support the right artisans”.

Are these trends helpful to you and your micro businesses? We DO need to know who will buy our products and services; we DO have to be accessible, we DO have to tell our stories so people will be interested in what we have not just once, but over and over again.

However, the basic truth is we have to deliver – meet a promise and provide a benefit – and then build trust. Do what you say you are going to do and take the action to make it work well…again and again. Every new business requires an initial ignition but then after that first spark, we provide the consistent follow-through over and over again!

The business action plan that we use individually and with small groups is an excellent tool to make this happen for any small business.

Let’s see how well we can grow when we “deliver the goods”.